By Mariah Fosnight, Senior Client Service Associate, Alford Group
Recently, Alford Group and Columbia Bank co-hosted the presentation of the 2019 Giving USA data and hosted a panel of Pacific Northwest funders and philanthropists to discuss the findings and relate them to the current realities of giving in the region. The full recorded webinar, including 2019 data and panel discussion, may be found here.
Giving USA, published by the Giving USA Foundation, is part of the Giving Institute which is comprised of leading consulting firms including Alford Group. Celebrating 65 years, this report is the longest running and most comprehensive and authoritative report on charitable giving in the United States.
The webinar began with an overview of the findings on charitable giving in 2019, presented by Karen Rotko-Wynn, CFRE, Executive Vice President and West Division Manager of Alford Group. Karen began by reflecting that every year when the data from the previous year is released, we cannot wait to see what the current year will look like! Prior to sharing the data, Karen pointed out that considering everything that has happened in the last six months, we may question why this information is relevant. She then pointed out that in fact, as leaders of nonprofit organizations, it is particularly important for three reasons:
- It is important to understand data trends to know where you should focus your efforts;
- Understand where your organization fits in to this data;
- Use this data as you navigate through this year and in your planning for future years.
The main takeaways from the Giving USA data is that giving reached nearly $450 Billion and for the third year in a row, total charitable giving surpassed $400 Billion! The presentation related to how giving responds to economic conditions such as the stock market, personal income, and gross domestic product. Giving USA is an excellent resource to see how philanthropy has adapted to the current environment. The key component is in individual giving. When you count outright individual gifts, bequests, and the fact that half of Foundation giving is directed by individuals or families – gifts from individuals comprise approximately 87% of total charitable giving. You can access the details of the presentation and key slides here.
Following the presentation of the Giving USA data, Karen introduced Brenda Asare, Alford Group’s President and CEO, who opened the panel discussion by reflecting that although we don’t have a crystal ball to predict the numbers for 2020, we can evaluate the emerging philanthropic trends and embrace them to maximize our year-end fundraising and impact. Brenda opened the panel discussion by stating that during this pandemic and issues around racial injustice, “we have an opportunity to elevate philanthropy’s essential role in addressing and responding to the human condition in more vital and lifesaving ways.”
Brenda introduced the panel: Pacific Northwest leaders Robin Callahan, Elena Fracchia, Dana Miller and Anjana Pandey who offered critical insights into philanthropy in our region today and provided ways in which we can build resiliency for the future. Their hopeful, yet urgent tone set the stage for a perceptive and inspiring discussion.
The panel’s insights illuminated three key themes related to funder and donor behavior during the first half of 2020 that can help us prioritize our fundraising activities and inform our donor stewardship strategies.
Three Key Themes
#1 – People may be giving differently, but they are still giving
The question is not if donors will continue to give this year but how they will give. A recent report, New Data on Giving During COVID-19 Highlights Unprecedented Need, indicated that more than 25% of donors intend to increase their current level of giving and 54% will maintain their current level this year. While 79% of donors plan to maintain or increase the amount they give to nonprofits, volunteer activity will likely decrease significantly due to the pandemic.
According to the Giving USA data, giving by Donor Advised Funds (DAFs) held at community foundations increased by 10.2%. Robin Callahan, Greater Tacoma Foundation, is experiencing this growing trend locally and has seen an increase in generosity from the Foundation’s fund holders over the past several months. The Foundation’s grantmaking has increased by 139% year-to-date over last year with the majority going to support basic needs. Fund holders have increased their giving to basic needs by 93% and arts and culture by 58%.
While foundation funding in our region remains strong, many grantmaking foundations have reduced or paused grantmaking and/or pivoted funding interests to include basic needs and unrestricted funding.
Dana Miller, M.J. Murdock Charitable Trust, noted that while the Trust continues to operate its regular grantmaking efforts, they also created a phased response to address immediate pandemic-related needs. Phase one grants were made to organizations addressing basic needs and phase two grants will be made to arts organizations that were heavily impacted by the pandemic. While the Trust typically aims to grant 5% of assets each year, they will end 2020 granting upwards of 8%.
Finally, we should not lose sight of the huge wealth transfer expected to happen over the next several years. Robin added that 87% of people’s assets are non-cash and that nonprofits should remember that Baby Boomers are preparing to transfer nearly $30 trillion in net assets over the next 20 years.
The Opportunity
Make it as easy as possible for donors to give to your organizations in various ways and keep your donors close. If you don’t already have one, develop a planned giving program and talk to your donors about estate planning, particularly through bequests, especially if they are unable to give outright gifts now. Incorporate information on giving through DAFs on your website, brochures, giving forms, etc. Make sure your organization’s address and EIN are clearly displayed on your website, brochures and giving forms.
#2 – Organizations that clearly and loudly articulate their need will not only survive the pandemic but will thrive well beyond it
If your mission was important to your donors before COVID-19, it remains important now. Ongoing needs have not changed in spite of the disruption caused by the pandemic. Elena Fracchia, Columbia Bank, has witnessed her clients stepping up and giving earlier and more often. She added that donor dollars are beginning to shift to the organizations that continue making their case and asking for donor support.
We want donors to know that you always need the funds, and more is better than less. Elena urges nonprofits to make sure this message is loud and clear. Despite a weakened economy, there are still donors who are able to increase their gift.
Robin added that helping your donors understand how it is that you’re making a difference is vital; the organizations that continue to tell their stories of impact and communicate their need continue to receive funding from community foundation fund holders.
Once you have articulated a strong case, ask for what you need. If you don’t ask, the answer will likely be “no.” Immense wealth created by the growth in the tech industry in our region continues despite the pandemic. Anjana Pandey, Philanthropy Northwest, mentioned that 8% of our region’s funding comes from corporations (with Boeing and Microsoft leading the way) compared to 5% nationally, and about 40% of our region’s funding comes from family foundations compared to 1.4% nationally.
Dana reminded us to consider all our organization’s needs when reaching out to foundations and individual donors. In addition to immediate financial resources, do you need in-kind resources, training or coaching, volunteers, or professional expertise? Since the onset of the pandemic, the Trust has provided free coaching to over 300 organizations, with many specifically helping organizations address racial justice issues.
The Opportunity
Develop and communicate a strong case-for-support. Ask for what you need and communicate that need often. Elevate your donor stewardship and retention plans and take advantage of our new reality in that many donors are home and available to meet virtually. Continue to convey why your mission is important, the impact your organization has and the urgency of your work. Elena urges you to be able to explain to donors “what changes because your organization is still here during the pandemic?”
#3 – Collaborating and pooling funds and resources can maximize ROI on philanthropic investments
Since Washington state was the initial epicenter of the pandemic in the United States, nonprofits had to respond quickly and effectively under a national spotlight.
Anjana praised our region’s funders as they rose to the occasion. Within 6-8 weeks, more than $60 million had been allocated or distributed to COVID-related causes. Donors and funders proactively reached out to their grantees and asked, “how can we support you?” General operating support is currently a strong and growing trend, and nonprofits and communities are benefitting. Anjana hopes that this trend continues to shift the power dynamic between grantees and funders beyond the pandemic.
Similarly, our community saw a flurry of commitments and statements immediately following the murder of George Floyd. Anjana hopes these statements to be upheld and result in systemic and sustainable change beyond this moment of racial reckoning.
Philanthropy Northwest launched the Washington Food Fund to pool resources to guarantee funding reaches every corner of Washington state and ensure food banks can procure the goods they need. Similarly, Greater Tacoma Community Foundation created a COVID-19 response fund to pool funds and create greater impact in Pierce County.
The Opportunity
Invest time in establishing funder relationships. Continue to explore funding opportunities with your local community foundation, family foundations, DAF holders and financial institutions.
In Closing, Brenda asked each panelist what growth opportunities exist for finishing 2020 fundraising strong.
Dana counseled us first and foremost, to stop and breathe. Then use this time to sharpen your relationships with your board and your team. Think carefully about how much your team and your organization can do and be realistic about what you can deliver even though the need is greater than ever.
Anjana urged nonprofits to look at the region’s pooled funds and assess whether your organization’s mission aligns with those potential funds. She also stressed the importance of investing in relationships with your funders and donors and developing effective storytelling skills.
Elena cautioned nonprofits to resist the temptation to try do it all and instead, clearly articulate what works for your organization and center your donor conversations around your impact during these tough times.
Robin reminded us that there will be a huge transfer of wealth in the next several years and recommended that nonprofits ensure they have a strong planned giving program in place.
All panelists agreed that we are facing unprecedented challenges, yet unprecedented creativity by nonprofit organizations, steady and increased generosity of donors and growing awareness of the vital role of the nonprofit sector are leading our society to meet those challenges with courage and conviction.